UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the period ended June 30, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the transition period from to
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Commission File Number 0-14476
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PS PARTNERS V, LTD., a California Limited Partnership
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(Exact name of registrant as specified in its charter)
California 95-397972
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
701 Western Avenue
Glendale, California 91201-2394
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 244-8080
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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INDEX
PART I. FINANCIAL INFORMATION
Condensed consolidated balance sheets at June 30, 1996
and December 31, 1995 2
Condensed consolidated statements of income for the three and six
months ended June 30, 1996 and 1995 3
Condensed consolidated statements of cash flows for the six
months ended June 30, 1996 and 1995 4
Notes to condensed consolidated financial statements 5
Management's discussion and analysis of financial condition
and results of operations 6-8
PART II. OTHER INFORMATION
(Items 1 through 5 are not applicable)
Item 6 - Exhibits and Reports on Form 8-K 9
PS PARTNERS V, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, December 31,
1996 1995
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(Unaudited)
ASSETS
Cash and cash equivalents $ 2,530,000 $ 2,059,000
Rent and other receivables 85,000 77,000
Real estate facilities, at cost:
Land 25,610,000 25,610,000
Buildings and equipment 79,466,000 79,059,000
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105,076,000 104,669,000
Less accumulated depreciation (34,351,000) (32,455,000)
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70,725,000 72,214,000
Other assets 208,000 175,000
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$ 73,548,000 $ 74,525,000
================== ==================
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 665,000 $ 832,000
Advance payments from renters 424,000 420,000
Mortgage notes payable 2,912,000 2,935,000
Minority interest in general partnerships 30,677,000 30,459,000
Partners' equity:
Limited partners' equity, $500 per unit, 148,000
units authorized, issued and outstanding 38,386,000 39,384,000
General partners' equity 484,000 495,000
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Total partners' equity 38,870,000 39,879,000
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$ 73,548,000 $ 74,525,000
================== ==================
See accompanying notes.
2
PS PARTNERS V, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------- --------------------------------------
1996 1995 1996 1995
---------------- --------------- ------------------ ------------------
REVENUE:
Rental income $ 3,944,000 $ 3,918,000 $ 7,779,000 $ 7,791,000
Interest income 29,000 31,000 54,000 60,000
---------------- --------------- ------------------ ------------------
3,973,000 3,949,000 7,833,000 7,851,000
---------------- --------------- ------------------ ------------------
COSTS AND EXPENSES:
Cost of operations 1,332,000 1,234,000 2,605,000 2,469,000
Management fees 229,000 226,000 452,000 450,000
Depreciation and amortization 952,000 872,000 1,896,000 1,757,000
Interest expense 72,000 73,000 143,000 146,000
Administrative 41,000 27,000 60,000 67,000
---------------- --------------- ------------------ ------------------
2,626,000 2,432,000 5,156,000 4,889,000
---------------- --------------- ------------------ ------------------
Income before minority interest 1,347,000 1,517,000 2,677,000 2,962,000
Minority interest in income (868,000) (860,000) (1,692,000) (1,684,000)
---------------- --------------- ------------------ ------------------
NET INCOME $ 479,000 $ 657,000 $ 985,000 $ 1,278,000
================ =============== ================== ==================
Limited partners' share of net income
($5.25 per unit in 1996 and $7.21
per unit in 1995) $ 777,000 $ 1,067,000
General partners' share of net income 208,000 211,000
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$ 985,000 $ 1,278,000
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See accompanying notes.
3
PS PARTNERS V, LTD.,
a California Limited Partnership
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
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1996 1995
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Cash flows from operating activities:
Net income $ 985,000 $ 1,278,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 1,896,000 1,757,000
(Increase) decrease in rent and other receivables (8,000) 7,000
(Increase) decrease in other assets (33,000) 1,000
Decrease in accounts payable (167,000) (171,000)
Increase (decrease) in advance payments from renters 4,000 (11,000)
Minority interest in income 1,692,000 1,684,000
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Total adjustments 3,384,000 3,267,000
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Net cash provided by operating activities 4,369,000 4,545,000
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Cash flows from investing activities:
Additions to real estate facilities (407,000) (322,000)
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Net cash used in investing activities (407,000) (322,000)
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Cash flows from financing activities:
Principal payments on mortgage notes payable (23,000) (20,000)
Distributions to holder of minority interest (1,474,000) (1,538,000)
Distributions to partners (1,994,000) (1,993,000)
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Net cash used in financing activities (3,491,000) (3,551,000)
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Net increase in cash and cash equivalents 471,000 672,000
Cash and cash equivalents at the beginning of the period 2,059,000 1,794,000
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Cash and cash equivalents at the end of the period $ 2,530,000 $ 2,466,000
================== ==================
See accompanying notes.
4
PS PARTNERS V, LTD.,
a California Limited Partnership
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
1. The accompanying unaudited condensed consolidated financial statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations, although management believes that the
disclosures contained herein are adequate to make the information presented
not misleading. These unaudited condensed consolidated financial statements
should be read in conjunction with the financial statements and related
notes appearing in the Partnership's Form 10-K for the year ended December
31, 1995.
2. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments, consisting of
only normal accruals, necessary to present fairly the Partnership's
financial position at June 30, 1996, the results of operations for the
three and six months ended June 30, 1996 and 1995 and cash flows for the
six months then ended.
3. The results of operations for the three and six months ended June 30, 1996
are not necessarily indicative of the results to be expected for the full
year.
5
PS PARTNERS V, LTD.,
a California Limited Partnership
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
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Three months ended June 30, 1996 compared to three months ended June 30, 1995:
The Partnership's net income was $479,000 and $657,000 for the three months
ended June 30, 1996 and 1995, respectively, representing a decrease of $178,000,
or 27%. This decrease was primarily due to decreased property operating results
at the Partnership's facilities combined with increased depreciation expense.
Net property income (rental income less cost of operations and management
fees and excluding depreciation) for the three months ended June 30, 1996
decreased $75,000 or 3%, as rental income increased $26,000 or .7%, and costs of
operations (including management fees and excluding depreciation expense)
increased $101,000 or 7%, compared to the same period in 1995.
Rental income for the Partnership's mini-warehouse operations was
$3,186,000 compared to $3,088,000 for the three months ended June 30, 1996 and
1995, respectively, representing an increase of $98,000, or 3%. This increase
was primarily attributable to increased rental rates. The monthly average
realized rent per square foot for the mini-warehouse facilities was $.64
compared to $.62 for the three months ended June 30, 1996 and 1995,
respectively. The weighted average occupancy levels at the mini-warehouse
facilities remained stable at 93% for the three months ended June 30, 1996 and
1995. Cost of operations (including management fees) for the mini-warehouses
increased $57,000 or 5%, to $1,145,000 from $1,088,000 for the three months
ended June 30, 1996 and 1995, respectively. This increase is primarily due to
increases in payroll, office, repairs and maintenance, advertising and property
tax expenses. Accordingly, for the Partnership's mini-warehouse operations,
property net operating income increased $41,000 or 2%, from $2,000,000 to
$2,041,000 for the three months ended June 30, 1995 and 1996, respectively.
Rental income for the Partnership's business park operations decreased
$72,000 or 9%, to $758,000 from $830,000 for the three months ended June 30,
1996 and 1995, respectively. This decrease was primarily attributable to a
decrease in the occupancy level at the Culver City, California business park.
During the first quarter of 1996, a major tenant vacated the facility following
the termination of its lease. The Partnership is actively marketing the
facility, and expects the occupancy level to improve during 1996. The weighted
average occupancy levels at the business park facilities was 90% compared to 94%
for the three months ended June 30, 1996 and 1995, respectively. The monthly
average realized rent per square foot for the business park facilities was $1.27
compared to $1.36 for the six months ended June 30, 1996 and 1995, respectively.
Cost of operations (including management fees) for the business parks increased
$44,000 or 12%, to $416,000 from $372,000 for the three months ended June 30,
1996 and 1995, respectively. The increase is due to costs associated with
leasing space which was vacated in the fourth quarter of 1995 and marketing
costs associated with the 1996 space vacated. Accordingly, for the Partnership's
business park facilities, property net operating income decreased by $116,000 or
25%, from $458,000 to $342,000 for the three months ended June 30, 1995 and
1996, respectively.
Depreciation and amortization increased $80,000 from $872,000 for the three
months ended June 30, 1995 to $952,000 for the same period in 1996. This
increase is principally due to the depreciation of capital expenditures made
during 1995 and 1996.
Administrative expenses increased $14,000 from $27,000 for the three months
ended June 30, 1995 to $41,000 for the same period in 1996. This increase is
principally attributable to costs incurred having the Partnership's facilities
appraised.
6
Six months ended June 30, 1996 compared to six months ended June 30, 1995:
The Partnership's net income was $985,000 and $1,278,000 for the six months
ended June 30, 1996 and 1995, respectively, representing a decrease of $293,000,
or 23%. This decrease was primarily due to decreased property operating results
at the Partnership's facilities combined with increased depreciation expense.
Net property income (rental income less cost of operations and management
fees and excluding depreciation) for the six months ended June 30, 1996
decreased $150,000 or 3%, as rental income decreased $12,000 or .2%, and costs
of operations (including management fees and excluding depreciation expense)
increased $138,000 or 5% compared to the same period in 1995.
Rental income for the Partnership's mini-warehouse operations was
$6,292,000 compared to $6,083,000 for the six months ended June 30, 1996 and
1995, respectively, representing an increase of $209,000, or 3%. This increase
is primarily attributable to increased rental rates. The weighted average
occupancy levels at the mini-warehouse facilities was 92% for the six months
ended June 30, 1996 and 1995. The monthly average realized rent per square foot
for the mini-warehouse facilities was $.64 compared to $.62 for the six months
ended June 30, 1996 and 1995, respectively. Cost of operations (including
management fees) for the mini-warehouses increased $131,000 or 6%, to $2,316,000
from $2,185,000 for the six months ended June 30, 1996 and 1995, respectively.
This increase is primarily due to increases in payroll, office, repairs and
maintenance, advertising and property tax expenses. Accordingly, for the
Partnership's mini-warehouse operations, property net operating income increased
$78,000 or 2%, from $3,898,000 to $3,976,000 for the six months ended June 30,
1995 and 1996, respectively.
Rental income for the Partnership's business park operations decreased
$221,000 or 13%, to $1,487,000 from $1,708,000 for the six months ended June 30,
1996 and 1995, respectively. This decrease in rental income is primarily
attributable to a decrease in the occupancy level at the Culver City, California
business park noted above. The weighted average occupancy levels at the business
park facilities was 90% compared to 94% for the six months ended June 30, 1996
and 1995, respectively. The monthly average realized rent per square foot for
the business park facilities was $1.26 compared to $1.37 for the six months
ended June 30, 1996 and 1995, respectively. Cost of operations (including
management fees) for the business parks increased $7,000 or 1%, to $741,000 from
$734,000 for the six months ended June 30, 1996 and 1995, respectively. The
increase is due to costs associated with leasing space which was vacated in the
fourth quarter of 1995 and marketing costs associated with the 1996 space
vacated. Accordingly, for the Partnership's business park facilities, property
net operating income decreased by $228,000 or 23%, from $974,000 to $746,000 for
the six months ended June 30, 1995 and 1996, respectively.
Depreciation and amortization increased $139,000 from $1,757,000 for the
six months ended June 30, 1995 to $1,896,000 for the same period in 1996. This
increase is principally due to the depreciation of capital expenditures made
during 1995 and 1996.
Administrative expenses decreased $7,000 from $67,000 in 1995 to $60,000 in
1996. This decrease is principally attributable to decreases in investor
services expenses, accounting expenses, and filing fees attributable to the
timing of payments of certain expenses partially offset by costs incurred to
have the Partnership's real estate facilities appraised.
7
Liquidity and Capital Resources
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The Partnership has adequate sources of cash to finance its operations,
both on a short-term and long-term basis, primarily from internally generated
cash from property operations and cash reserves. Cash generated from operations
($4,369,000 for the six months ended June 30, 1996) has been sufficient to meet
all current obligations of the Partnership.
During 1996, the Partnership anticipates approximately $918,000 of capital
improvements (of which $262,000 represents the minority interest's joint venture
share). During 1995, the Partnership's property manager commenced a program to
enhance the visual appearance of the mini-warehouse facilities managed by it.
Such enhancements will include new signs, exterior color schemes, and
improvements to the rental offices. Included in the 1996 capital improvement
budget are estimated costs of $176,000 for such enhancements. Total capital
improvements were $407,000 for the six months ended June 31, 1996 of which
$323,000 represents the Partnership's share.
The Partnership paid distributions to the limited and general partners
totaling $1,775,000 ($12.00 per unit) and $219,000, respectively, during the
first six months of 1996. Future distribution rates may be adjusted to levels
which are supported by operating cash flow after capital improvements and any
other necessary obligations.
8
PART II. OTHER INFORMATION
ITEMS 1 through 5 are not applicable.
Item 6 Exhibits and Reports on Form 8-K
(a) The following Exhibits are included herein:
(27) Financial Data Schedule
(b) Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: August 13, 1996
PS PARTNERS V, LTD.,
a California Limited Partnership
BY: Public Storage, Inc.
General Partner
BY: /s/ Ronald L. Havner Jr.
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Ronald L. Havner, Jr.
Senior Vice President and Chief Financial
Officer of Public Storage, Inc.
(principal financial officer)
BY: /s/ John Reyes
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John Reyes
Vice President and Controller
of Public Storage, Inc.
(principal accounting officer)